Two And A Half Rupees: India’s Short-Lived Yet Exotic Note

The note was released by the British Indian government on 2 February 1918.

A Rs 2/8 or 2.5 note

(Photo: Banknote Index)

Exactly a hundred years ago, India got its first 2.5 rupee note, a denomination that was exotic even at the time it was issued.

Printed as 2/8, which actually meant two rupees and eight annas. The Indian rupee at that point was divided into 16 annas, taking off from the pre-British monetary system.

According to a report by The Indian Express, the note was released by the British Indian government 2 February 1918, at a time when the World War I was at its peak, and India was fast losing its silver resources to the war. The demand was sky-rocekting, leading to a shortage in the metal for minting purposes.

The British government took the help of the US government to replace their fast depleting silver resources, but the reserves remained insufficient to meet public demand.

Ultimately, the government withdrew silver coins from circulation, replacing the lower denominations with copper-nickel coins, while also introducing Re 1 and Rs 2.5 notes. Till this time, Rs 5 was the lowest denomination note available in the Indian monetary system.

The Indian Express report cites an official letter for the reason behind the note's odd '2/8' denomination. According to Letter No 139 of 1917 of Government of India’s Finance Department,

We cannot look for immediate acceptance of such notes in any large quantities, and we consider that 2/8 note, which would introduce a fresh denomination intermediate between the available one rupee coin and a five rupees note which ordinarily hold out better chance of success.

The denomination's short life makes it a collector's rare delight. A surviving note was auctioned of by Mumbai's Todywalla auctions at Rs 6,40,000. Citing The Hindu’s interview with Farokh Todywalla, the founder of Todywalla auctions, The Indian Express quoted:

It was printed when India was experimenting with shifting from the rupee-anna denomination to the dollar. So they came out with this one, which is equivalent to one dollar. In the public space it did not work, so circulation had to be withdrawn, which is why the note is very rare indeed.

While both the Re 1 and Rs 2.5 notes were withdrawn from circulation on 1 January, 1926, the Re 1 resurrected during the times of World War II. The Rs 2.5, however, never made a comeback, thus ending its short-lived yet exotic existence.

(With inputs from The Indian Express.)